Micron Stock Surges as AI Demand Pushes Shares to Record Highs

Micron Technology, Inc. (MU) stock is experiencing a remarkable rally on October 16, 2025, with shares climbing over 6% to reach $204.25 as of 10:59 AM EDT, hitting all-time highs near the $200-$205 range. The memory chip manufacturer has nearly doubled in value year-to-date, soaring over 143% as explosive demand from artificial intelligence applications and data centers drives unprecedented growth.

The stock’s dramatic surge comes amid record-breaking earnings, bullish guidance, and overwhelmingly positive analyst sentiment, positioning Micron as a primary beneficiary of the AI revolution sweeping through the semiconductor industry.

AI Server Demand Pushes Revenue and Profit to All-Time Highs

Micron’s fiscal 2025 results showcased the company’s dramatic turnaround, with full-year revenue reaching $37.4 billion (up 49% year-over-year) and net income of $8.5 billion. The fourth quarter alone delivered revenue of $11.32 billion and non-GAAP earnings per share of $3.03, both exceeding analyst expectations. This represents the company’s best year ever, marking a stunning recovery from the memory market downturn of 2022-2023.

The driving force behind this explosive growth is unprecedented demand for High-Bandwidth Memory (HBM) chips critical for AI servers and data centers. Micron’s advanced HBM3E memory technology positions it as a key supplier for NVIDIA’s latest AI accelerators, with HBM products effectively sold out through next year. The company reported approximately $2 billion in HBM sales in Q4 alone, while its cloud/server memory segment revenues skyrocketed 213% year-over-year. Gross margins have expanded dramatically to approximately 45.7%, reflecting the premium pricing power of AI-tailored products.

Management issued exceptionally bullish guidance for the current quarter (Q1 FY2026), projecting revenue of approximately $12.5 billion and earnings per share of $3.70 at the midpoint, significantly surpassing Wall Street’s prior estimates of around $11.9 billion and $3.10. This outlook implies roughly 35-40% year-over-year growth with gross margins expected above 50%, underscoring the robust and sustained nature of AI-driven demand.

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Analysts Raise Targets as AI Upside Fuels Long-Term Bullishness

Wall Street analysts have responded enthusiastically to Micron’s performance, with 26 out of 30+ analysts rating the stock as Buy or Overweight. Recent price target increases include UBS raising its target to $225, Morgan Stanley upgrading to Overweight with a $220 target, and BNP Paribas setting a street-high target of $270. Most recently, Citigroup maintained its Buy rating while raising its price target from $200 to $240, citing expectations for “unprecedented” DRAM demand from AI applications.

Despite the stock’s remarkable 143% year-to-date gain, valuation metrics suggest room for continued appreciation. Micron trades at approximately 20 times forward earnings with a PEG ratio of just 0.18, indicating the stock price hasn’t fully kept pace with its explosive earnings growth trajectory. The consensus forward earnings estimate for fiscal 2026 sits around $16-$17 per share, roughly double the just-completed year.

However, some analysts caution that much of the positive news may already be reflected in the stock price, noting that Micron trades at cycle-peak valuations and that the notoriously cyclical memory market could eventually shift from shortage to oversupply by 2026-2027. The company’s market capitalization now stands at approximately $229 billion, firmly establishing Micron as a market leader riding the AI wave.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.